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Uber classifies UK drivers as workers

Uber has agreed to reclassify its UK drivers as workers, following a Supreme Court ruling in February which ruled Uber drivers as ‘workers’ while they’re logged into the ride hailing app. 

17th Mar 2021
Editor AccountingWEB
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Mobile app Uber on a Apple iPhone XR

Uber’s decision means 70,000 drivers will earn at least the UK national minimum wage (NMW), receive holiday pay and be auto-enrolled onto a pension plan . 

It took the ride-hailing app four court defeats to overhaul its treatment of drivers. The Supreme Court ruling was the end of the road for Uber’s argument that its drivers were independent contractors, not workers. 

Uber confirmed that the new conditions brought about by the Supreme Court ruling will come into force from today. 

Jeremy Haywood, regional manager for Northern Europe at Uber, told the BBC: “What happened a month ago was the Supreme Court provided clarity into what a worker really meant. By providing clarity of that, they’ve given us a path forward where we can bring the protections drivers deserve under the worker status with the flexibility they want.” 

What are the new conditions?

Under the new conditions Uber drivers will be entitled to holiday pay based on 12.07% of their earnings, paid on a fortnightly basis.

Drivers will also be paid at least the NMW of £8.72, with workers aged 23 and over receiving £8.91 from April. 

Uber said that drivers will be auto-enrolled onto a pension plan and will continue to have free insurance cover for sickness, injury and parental payments, which had been in place since 2018. 

The drivers will still have the ability to choose if, when and how to work.

Uber is not the first gig economy business to hand benefits to its zero-hour workforce. In 2018, the courier company Hermes created an opt-in self-employment-plus model for its drivers, offering basic employment rights, 28 days’ holiday, a guaranteed pay rate just over the minimum wage and their pay taxed as self-employed. 

Uber ‘shortchanges’ drivers

James Farrar and Yaseen Aslam, the two drivers who took their case to the London employment tribunal in 2016, said Uber’s decision to finally pay minimum wage, holiday pay and pension doesn’t go far enough. 

“They have arrived at the table a day late and a dollar short, literally,” said Farrar in a statement released on Twitter. 

“The Supreme Court ruled that drivers are to be recognized as workers with entitlements to the minimum wage and holiday pay to accrue on working time from log on to log off whereas Uber is committing only to these entitlements to accrue from time of trip acceptance to drop off.”

Aslam and Farrar said that this means Uber will shortchange drivers by 40-50%. “It is not acceptable to unilaterally decide the driver expense base in calculating minimum wage. This must be subject to collective agreement.”

Meanwhile, GMB, the union for Uber drivers, admonished Uber for having to be dragged “kicking and screaming to do the right thing”. 

“It’s a shame it took GMB winning four court battles to make them see sense, but we got there in the end and ultimately that’s a big win for our members,” said Mick Rix, GMB national officer

He added: “Other gig economy companies should take note - this is the end of the road for bogus self employment.” 

What’s next?

And this is the unanswered question coming out of this Uber episode - will other gig economy companies such as Deliveroo or Amazon give their workforce similar benefits?

Uber is hoping its U-turn will lead the way for others. Uber’s Heywood said he hopes “other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives”.

However, at the moment, other operators have yet to back Uber’s about-turn crusade.

When Rebecca Seeley Harris covered the implications of the Supreme Court ruling on AccountingWEB, she didn’t see the judgment as a game-changer. “Every so often a Supreme Court case comes along with a lot of promise, but at the end of the day, the cases are all quite specific to the facts,” wrote Seeley Harris. 

Replies (2)

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By Nebs
18th Mar 2021 11:19

I wonder how this will affect accountants who have "self employed" subcontractors that are not members of a professional body, don't have PI insurance, and are not regulated for money laundering?

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By johnjenkins
18th Mar 2021 11:35

Now we are out of the EU (they were the ones who designed "a worker") surely we can ditch this nonsense. How can a tax payer be self-employed yet get benefits?

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